Venture Capital Outside of Silicon Valley

As someone who spends a quarter of my time in the Valley, a quarter of my time traveling around the country, and 50% of my time in the Mid-Atlantic, I see many differences in the way entrepreneurs and investors interact, the way startups outside the Valley think about building businesses, and the advantages and disadvantages of being in Silicon Valley. Most of the differences will be the subject of future posts – here I will try and describe the differences I see between venture capital in the Valley (and recently New York City) and the rest of the country.

Venture capital/entrepreneurship in the Valley is a well trod path. The ecosystem is optimized for start ups, the culture is one of innovation, and it is possible to spend your entire time in the Valley completely immersed in everything startup. Having grown up in the Bay Area, gone to school there, and returning every month, I can say there are pros and cons to such an insular life. But again, another post’s subject.

Venture Capital outside of the Valley is clearly not the same – it is not better or worse, just not the same. There are smart, aggressive, innovative entrepreneurs all over the country – I see them everyday & several of them we have invested in at True. The venture capital ecosystem that exists in the Valley however is not everywhere. There are great early stage investors, great growth investors, and great late stage investors all over the country – but outside the valley, they are generally not in the same geography – and hence, one of the big differences. In the Valley (and select other pockets around the country), an entire lifecycle of funding can be found within an hours drive. Your Seed/Series A investors are at True’s Pier 38 office in San Francisco, your Series B and C investors are in Menlo Park/Palo Alto, and the investment banker is in the city. This is simply not the case everywhere. This doesn’t make it bad – it just makes it harder. True has phenomenal companies outside the Bay Area, but I can tell you they spend a lot of time on planes. The founders of these companies made conscious decisions and trade offs to form their companies where they are. Perhaps they wanted to be near a particular university, perhaps they had spouses that couldn’t move, children they didn’t want to take out of school, they needed to be physically near a large vendor, or they just didn’t want to move to California. Whatever the reason, they made the decision, and we support it.

We believe great companies can be built anywhere – especially today.